Baig: T-Mobile CEO Legere not shy on plans

Jan. 9, 2013
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T-Mobile CEO John Legere. / David Becker Getty Images

by By Edward C. Baig, USA TODAY

by By Edward C. Baig, USA TODAY

LAS VEGAS -Top executives at wireless companies don't typically say the kinds of things publicly that you hear all the time from people on the street. T-Mobile USA's new CEO John Legere - he was appointed in September - is a refreshing exception.

"Anybody here from New York?" Legere asks a crowd of journalists packed into a room at the Venetian Hotel. "Anybody here using AT&T? Anybody using it happy? Of course not, the network is crap!"

Legere later amended his remarks to say that he didn't mean that the AT&T network was crap, just that "it's not as good as ours" - a point he says he has to push because "that is not the common person's understanding."

Legere didn't pull too many punches during a session with reporters in which the nation's fourth-largest carrier announced several initiatives, notably a multimillion-dollar sponsorship and technology deal with Major League Baseball, and a new 4G unlimited nationwide $70 monthly data plan, which kicked in today, that doesn't require you to sign an annual contract.

T-Mobile also launched HD Voice nationwide, which it claims enhances the calling experience on compatible smartphones such as the Samsung Galaxy S III, the HTC One and Nokia Astound. (Time will tell.)

Meanwhile, the carrier is busily modernizing its network. It's rolling out its faster LTE network, with expectations to reach 100 million people by midyear, double that by the end of the year. It's also closing its merger deal with MetroPCS.

Legere weighed in on wireless subsidies and talked about Apple, noting that even though T-Mobile is the only major U.S. carrier not yet officially selling iPhones - that will come in a few months - it's servicing 1.9 million "unlocked" iPhone devices and adding 100,000 new ones every month.

As part of its baseball agreement, T-Mobile will provide the wireless technology to let managers in certain ballparks communicate with coaches in the bullpen. Former big league manager Joe Torre and Washington Nationals outfielder Bryce Harper were on hand at the announcement.

But Legere reserved his most cutting remarks for a discussion on the way phones are sold today. From the consumer standpoint, hooray for that.

"If you landed from Mars on this planet â?¦ you would get back in your spaceship and go (back) where you came from," Legere says. "It makes no sense. We sell cheap devices and lock people in as prisoners for multiple years, clearly, until we can recoup the value."

T-Mobile's strategy is to brand the company the "Uncarrier," changing the ways of the business along the way.

"We're going to create an experience where anybody at any time can have any device they want from us, cheaper than the competition. Stop this differentiation between contract/no contract, prepay/post pay. We think everybody deserves an unlimited 4G experience on the latest devices they want. We think everybody should be able to upgrade their devices any time they want."

Legere laid out the realities of a typical cellphone transaction.

"I've spent months negotiating with one of those very large companies that sells products with a fruit on the back. They don't give them away. And they don't give them to any of us for a different price than the other one. You get it from them, and it costs X, we give it to you - we're not in this for fun - and we get your money. Ever ask yourself why a contract is two years? Is there something magical? It takes that long to figure out if I have the price cheap enough and also extract the value back."

Current Analysis research analyst Avi Greengart says T-Mobile's challenge will be "convincing consumers to do math. Figure how much their phone is costing over a two-year period with a rival carrier, which is something U.S. consumers have not been willing to do thus far. (If so, T-Mobile) definitely has a shot at making a dent in the industry."

Of course, no matter what the phones costs, people have to be convinced that the network is up to snuff. Along those lines, Legere cites a bunch of statistics: dropped call rates declining in the 70% range; 30% improvement in data throughput; better in-home coverage.

Legere looks to Verizon Wireless as the gold standard, though he couldn't resist a dig: "The way they cover those Dust Bowl states with LTE I think is admirable."

But he went on to say that "all of us in the industry acknowledge that Verizon is unbelievable. They have a beautiful network with incredible capability. They spent more money than a small nation building that capability. "

Any negatives? "This isn't a shot (at Verizon) because I would never take a shot at someone 25 times my size - but shared data plans are a thing of the past," he says. "A basic Samsung Galaxy (S III) is pulling down between 2 GB and 3 GB of data already."

To succeed with its ambitious plans, analyst Greengart says T-Mobile must break through the noise. "If their CEO is any indication, they won't have a problem with that."